GM's value higher than Ford's

Mikey take note
GM's value higher than Ford's
http://tinyurl.com/y3rjfcz
General Motors is worth more than Ford.
Say what?
Isn't Ford the hot automaker on a roll, gaining sales, posting profits,

riding the goodwill of a nation for avoiding federal life support and
sporting a stock price that's tripled in the past year?
And isn't GM the much-derided Government Motors, 61% owned by Uncle Sam,
shrunken from eight to four brands in a bankruptcy that wiped out the
Old GM shareholders, and still losing money as of its latest financial
report a week ago?
True on both counts, but strange as it may sound, GM is worth more than
Ford.
Says who?
Says the trading price of Old GM bonds, now called Motors Liquidation
bonds, which are trading for three times what they were worth before GM
filed for Chapter 11 bankruptcy.
Huh? Why would that be?
Ah, now comes the tricky part, based on funky math that I won't attempt
to explain here, except to say it involves partial differential
equations and the Black-Scholes formula, which I believe was developed
by an alien civilization.
Seriously, here's what's happened at GM, as explained to me by J.P.
Morgan credit reports and some big brains from the worlds of private
equity and President Barack Obama's auto task force.
The task force pushed GM into bankruptcy last June, wiping out common
stockholders and squeezing the holders of $27 billion in GM bond debt
into accepting a 10% share of the nebulous value that a future,
post-bankruptcy GM might achieve. Bondholders also got warrants to buy
more stock in a New GM if its future value exceeds $15 billion, and
again if it exceeds $30 billion.
That old bond debt, along with old lawsuits, contracts and other trash,
was dumped into Old GM, or Motors Liquidation.
The GM bonds no longer function as traditional interest-earning bonds,
but as bets on the future value of an initial public offering of stock
in the New GM.
Since GM emerged from bankruptcy, confidence in its survival and
possible rebound has grown. Bonds that were trading for a paltry 12
cents on the dollar a year ago rose to around 20 cents in November, and
last week traded at about 34 cents.
That trading reflects estimates that GM's total equity value may be
somewhere in the range of $50 billion to $66 billion based on its
current cash and debt and projections of future profits. By comparison,
the total market value of Ford stock was $45.4 billion, based on
Friday's closing price of $13.43 a share.
Plenty of ifs
So, because GM has more cash than Ford (Thanks, taxpayers!) and less
debt than Ford because of bankruptcy, GM is worth more than Ford? Yes.
Well, maybe:
• If GM can post operating profits of $8 billion this year, as Ford is
expected to do.
• If GM can deliver a couple of clean quarters of coherent financial
reports, without special charges or bankruptcy-related legal and retiree
costs, to build investor confidence before an IPO.
• If Wall Street stays enthusiastic about stocks and IPOs.
• And if the overhang of Uncle Sam's desire to sell its 61% ownership
stake doesn't unduly depress GM's future stock price.
Those are a lot of ifs, of course. So taxpayers, who have pumped about
$150 into GM for every man, woman and child in the USA, should not be
spending their refund checks for the rescue just yet.

Well, not worth more, but has more paper, maybe.
I think that GM may actually be making a decent product now....at least,
in some cases.
I hope that they can come back and really prove themselves, make something
good, do business honestly, and rise like a phoenix.

Bet if Ford got a $170 billion they to would would plow GM into the ground.
GM had $177 billion of debt on their Dec 2008 books. Add in the losses
into 2009, likely topped $200 billion. Taxpayers, bond holders,
preferred share holder, share holders and suppliers all took the bath
for GM negligence and incompetance.
If GM isn't in better shap with owing a mere $12 billion to the Canadian
and US governments, their offical debt, then WTF.
Give me $170 billion and I could make more money than GM.
But unfortunately Obam bails out losers and inept at the price of
success. Ford would be more popular today if GM went under. So would
Toyota, Honda, Nissan, BMW and perhaps even Chrysler. But that is the
price of dirty marxist/socialist corrupt business.
So remember when you pay taxes, you are supporting UAW and GM. And the
have a lobby group to make sure politicians get their cut. At your
expense of course.

--
Time to ask, is our government serving us or are we serving the government?

Says me. Basically GM unloaded over $170 billion of debt by stiffing
taxpayers, bond holders, preferred shareholders and various suppliers.
Sort of like having a 500% mortgage on your house wipped out by a stoke
of the pen by Obama and congress. Of which well over $50 billing gets
shifted to Amercian and Canadian tax payers. (GMAC, Delco, Chrylser extra).
Now with that kind of blood letting on the taxpayer, if GM isn't worth
more something is very, very, very wrong. The registered debt to the
taxpayers of the US is less than $7 billion dollars. Yep, only $7 billion.

You know Carlyle Group will love that. Getting all the Lehman holdings
for 1 cent on the dollar. Now it is worth billions.

See above, follow the money.
[ snip ]
In a nut shell, the biggest scam in the history of taxpayers has been
pulled. It was known 8 years ago or more GM would spin off it's
lucrative parts leaving the rotten parts of GM to die or get bailouts.
GM was allowed to operate for years in techncial bankruptcy.
Notice how 79% of the people we against in and how little noise congress
and senate made on misappropriation of TARP for corrupt auto.
GM might go back on the market, and maybe net $30 billion, but when you
add it up, GM has screwed over so many for so much, and not one crook is
in jail. Not a one.
So if someone says GM is in a better financial position, they would be
right. The best financial position taxpayer debt funded money can buy.

--
Time to ask, is our government serving us or are we serving the government?

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